Adapt your business to the fast lane

The last time I went to a motor racing event I was 19, it was Mount Panorama at Bathurst, and I swore I'd never go to another one ever again. I spent most of the day trying to avoid drunken louts perched on sofas which they brought to the track on the back of utes. They were surrounded by endless slabs of beer and some smoked dubious smelling substances. At the end of the day, these sofas were unceremoniously torched after the final race and the aforesaid louts left the track with a sea of carnage in their wake.

So when I went to the Tasmania Microsoft Office 365 V8 Supercar event last weekend, I wasn't prepared to find cappuccinos, a Disney amusement park for kids, and a crowd so well behaved you would be forgiven for thinking you were at a church picnic. (Just a very noisy one.)

The business of motor sport is, after all, a business. Like all businesses, it has to adapt to stay relevant to its fans, drivers and sponsors. With about 70 core staff, V8 Supercars is owned by private equity firm Archer Capital (70 per cent) and the race teams themselves (30 per cent). Archer Capital acquired a majority stake in May 2011.

So what can all entrepreneurs learn from the evolution of this business?

1. Go to where your customers arePlaces like Mount Panorama at Bathurst or Symmons Plains in Tasmania (about 30 kilometres from Launceston) aren't exactly convenient locations. You have to be a really committed motor sport fan to trek out there for the day. So how do you entice new attendees to experience the sport? As the saying goes: "'If the mountain will not come to Muhammad, then Muhammad must go to the mountain." And that's exactly what V8 Supercars has done.

"We now have more street events than we used to," says Cole Hitchcock, V8 Supercars' general manager media and communications. Hitchcock is referring to race events that are held on real streets as opposed to purpose-built tracks. These include Townsville in Queensland and Homebush in Sydney. Taking the race to the people is all about garnering new fans, increasing ticket sales and keeping the sport relevant.

2. Target new segmentsIt's no secret the target market for motor racing is traditionally male. However, it makes smart business sense to identify new markets which will not only appreciate the sport, but also bring in additional revenue. Few could imagine companies like Microsoft sponsoring the sofa-burning antics of yesteryear. And back then, Disney would never have made an appearance.

"Most sports by their very nature are male-dominated," says Hitchcock. "But when it comes to sponsors, partners and investors, the wider the demographic, the more appealing it is to them. We had the opportunity to expand our reach."

Hitchcock estimates 10 years ago the gender ratio was 70:30, skewed to males. "These days, it's 50:50," he says. "There's a bigger emphasis on families and we provide entertainment for kids."

As its core fans get older, V8 Supercars knows it needs to capture new – and younger – fans. General manager of events Mark Perry says the business has adapted to the changing wants of its audience. While yesterday's fans may have been happy to watch cars whiz by from assigned seats in grandstands – or tinnie-strewn hills – today's young crowd wants flexibility and lots of options. "Young people tell us that they like to wander around, like at a music festival," says Perry.

To this end, the Tasmanian event featured a "backyard" where, for an additional $20, people could experience the vantage point of a corporate box, but in an outdoor setting with a DJ. Perry says: "In the future, we might have one area with a DJ, another with an acoustic act, and another with a band. But you'll be able to access any of them on the same pass. You need to keep your fan base happy."

He says the expectations of fans may also have an impact on the types of cars racing. "In Europe, they're building electric cars. When you hear them race, it's like standing in a library. The only thing you can hear are the wheels turning." While the "vroom" of the V8 engines has been synonymous with motor racing for decades, Perry is matter-of-fact: "It's about embracing the future."

3. Enhance the user experienceBack at Mount Panorama when I was 19, some keen fans carted bulky television sets with "rabbit ear" antennas to the track in order to watch the race coverage. Most relied on radio commentary. These days, V8 Supercars has embraced streaming video so that fans can be trackside but have a multi-camera experience on their mobile device.

In theory, fans may eventually have the option to view press conferences, in-car cameras, pit changes, interviews and other behind-the-scenes footage. However, if 50,000 fans all want to stream video, this poses congestion issues when it comes to internet bandwidth. "We're looking at options to improve connectivity," says Hitchcock. "We can always boost the signal strength by bringing in signal towers. Generally the telcos like to do that when a big event comes to town because it's bad for their customers if they can't access data."

4. Pay attention to your growing painsWith attendance at events growing 10 per cent year-on-year, V8 Supercars has evolved from a business that has gone from about 30 staff to 70 staff over the past 10 years. Peter Trimble stepped into the role of director of finance and systems 18 months ago and says the company's systems were out of date. "We evolved from a small company that ran on the smell of an oily rag, and we grew very quickly. We had staff using so many different versions of Microsoft Office software – some were still on [versions] 2003, others on 2007, others on 2010, and so on. We had people who wanted to use their own hardware (laptops and tablets), and we had an archaic drive for our staff to access shared files while they were on the road."

Trimble admits that the system would crash, freeze and generally not work. "We were broken," he says. "And we were broken in the most basic areas. It was also costing us a lot of money to run a broken system."

After consulting with external IT experts, Trimble decided to migrate operations to Office 365. This is a subscription-based version of Office (which includes applications such as Word, Excel, Powerpoint, Outlook). It also allows users to store documents 'in the cloud' for easy sharing.

He says it took six to eight weeks to migrate the operations of the business to Office 365 and has resulted in cost savings. "In terms of hard costs, we are miles in front. If we add people, we just pay for another user account. As we drop people, our costs go down," says Trimble, referring to the subscription-based payment model.

While Trimble has not formally measured improvements in productivity, he says: "I just know that I used to get calls on a regular basis about our technological problems. But that doesn't happen now. And, under our previous system, people would often work until 10 or 11 at night to get the job done because they were dealing with a system that was slow and unreliable. I suspect, at the very least, we have less burnout among our staff."

Trimble is happy with the move to a cloud-based solution but he says it will only work effectively "as long as you have internet connectivity." While documents can be stored locally (on your own hard drive), a fundamental tenet of cloud solutions is a reliance on internet connectivity. Trimble concedes: "At some of our smaller regional events, there may be challenges and costs associated with getting connectivity."

Cloud-reliant applications can truly be a boon for small businesses. In addition to Office 365, these also include Google Apps for Business, arguably its main competitor, and also cloud-based customer relationship systems such as Salesforce. Many users of cloud-based applications report improvements in productivity and reduction in costs, not only in software expenses but also IT support costs.

However, intrinsic to the success of these solutions – and the success of today's businesses – is fast and reliable internet.

While businesses in metropolitan areas may take fast and reliable internet for granted, many regional areas in Australia are still under-served by digital infrastructure, with worsening bandwidth congestion as more users get online. And fast internet via the NBN won't be completed until 2021.

The trend of "moving to the cloud", in the same way as V8 Supercars, is gaining momentum among large and small businesses.

In theory, businesses should be able to race ahead with the benefits that cloud-reliant applications can provide. But, in reality, bandwidth congestion and lack of digital infrastructure will ultimately put the brakes on any business that really wants to harness the power of what these cloud-based tools can bring.

The writer attended the Tasmania Microsoft Office 365 V8 Supercars event as a guest of Microsoft.